Texas LCO's - Sales Tax Question

Discussion in 'Business Operations' started by DFW Area Landscaper, Mar 12, 2005.

  1. DFW Area Landscaper

    DFW Area Landscaper LawnSite Silver Member
    from DFW, TX
    Posts: 2,116

    Do you charge sales tax on a delivery fee?

    My standard fee this year for a bed clean-up is $36/man-hour, $3.00 per bag of mulch and a $50 delivery fee.

    Do we collect sales tax on the delivery fee?

    This websight is unclear. http://www.window.state.tx.us/taxinfo/taxpubs/tx94_112.html

    My gut feeling is that we do not have to pay sales tax on a delivery fee. Anyone know for certain?

    Thanks,
    DFW Area Landscaper
     
  2. beransfixitinc

    beransfixitinc LawnSite Senior Member
    Posts: 592

    I would say, yes, you do, as the delivery is a service, and since you are charging a fee for it, it is a taxable service.

    When we pick up a unit and charge to do it, we have to collect the sales tax on the total ticket for the point of final redelivery.

    IE: We pick up and deliver a mower in the county, county tax is 6.25%.
    We pick up and deliver a mower within the limits of a city, we have to collect the city tax as well. For our nearest town, that means 6.25% + 2% for a total of 8.25%. This is even though the service and repair is being performed at our shop, which is located outside the city limits, in the county.
     
  3. SCW

    SCW LawnSite Member
    Posts: 29

    It was explained to me by a Sales Tax Auditor that if the service is taxable, then the associated nominal fees (i.e. - delivery fee) is also taxable.
     
  4. DFWProLawn

    DFWProLawn LawnSite Member
    from DFW, TX
    Posts: 15

    DFW, I know I am a little late on this one, but my CPA says that indeed we do have to charge sales tax for the delivery. Pretty much sales tax on everything. (Customers LOVE this). Hope this helps

    ProLawn
     
  5. Tim Canavan

    Tim Canavan LawnSite Member
    from Houston
    Posts: 218

    If you have any doubt, take out the delivery fee and increase the price of the mulch. (labor and delivery included)
     
  6. bcg

    bcg LawnSite Bronze Member
    from Tx
    Posts: 1,835

    It's essentially shipping and shipping charges are taxable in Texas.
     

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